Tag Archive: Spotify

The micro-news behemoth has jumped into the music game. So, what’s in it for you?

Today, Twitter finally rolled out its new music app, which is called Twitter #music. The company’s ambitions are predictably grand, calling the app “a new service that will change the way people find music, based on Twitter.” As a streaming songs and discovery service, they are entering a crowded and growing field, one that leaves users with various similar options. Let’s try and figure out how Twitter #music differentiates itself.

How does Twitter #music work?

Twitter #music has five tabs for exploration: “Popular,” which collects music that is trending on Twitter; “Emerging,” which promises “hidden talent found in the tweets”; “Suggested,” which uses an algorithm to offer music it thinks you might be into; “#NowPlaying,” which displays music currently tweeted by people you follow, using that hashtag; and “Me,” which simply displays music by artists you follow. Clicking on a tile will play an artist’s song, and offer you more music to listen to, either by that specific artist or other similar artists.

Where can I get Twitter #music?

Twitter music is currently available on iPhones via the App Store, and mobile is where Twitter is really hoping their music service explodes. But there is also a web-based app, available atmusic.twitter.com. Twitter says that an Android app will be rolled out soon.

Twitter is smartly trying to put the information it collects from its massive database of 200 million users to work, and for that reason Twitter #music is more discovery-based than Spotify or Rdio. Twitter wants you to click around its app and discover new artists and songs — be it a song so popular you feel stupid for not knowing it, or an artist you’ve never heard of — which will allow it to hone its suggestions to you and users like you. It wants you to get lost in the app even if you weren’t searching for anything specific.

Is Twitter #music in competition with other services?

Listen to new song from Black Sabbath here: http://go.spin.com/10lLOF8

Not yet, at least. Twitter #music plays previews of songs via iTunes as its default setting, but Spotify or Rdio users can link with Twitter #music to hear full tracks through those services in the Twitter #music app.

Will Twitter #music actually help me discover new music?

That depends. It’s a service that is primarily geared to the casual listener, so music nerds may find less worth in it. It suggests artists like Fabolous, 2 Chainz, Meek Mill — major rap stars who have likely been heard by anyone with an interest in rap music — but also artists like Kilo Kish, Kano, and Little Dragon, who are not exactly underground, but at least a bit more unknown. Absolutely voracious music fans will probably still find themselves plumbing the depths of something like Spotify.

Which of Twitter #music’s features holds the most potential?

Either the “Suggested” or “Emerging” tabs, which do the most to expose users to artists or songs they may not have heard. Both have their biases — “Suggested” could go much deeper than it does, while “Emerging” currently offers mostly white people with guitars, even ones like the Appleseed Cast and the Pastels, who have long since “emerged” from wherever they came.

What’s wrong with the other features?

Well, the “Popular” tab barely varies from something like the popular charts on iTunes or Spotify, though acts such as Azealia Banks, Robin Thicke, and Little Mix manage to slip in amongst the usual suspects Pitbull and Taylor Swift. Otherwise, Twitter #music is highly dependent on active engagement with musicians on Twitter by you and the people you follow. If you only follow 20 musicians on Twitter or don’t have friends that actively tweet about what they’re listening to, the “#NowPlaying” and “Me” tabs will be very limited.

If I follow a musician on Twitter, why do I need an app to discover their music?

This is probably the most obvious piece of evidence that reveals Twitter #music as an app for Twitter users that aren’t voracious music listeners. If you follow a musician on Twitter and keep up with their work, or are aware of artists similar to those you follow on Twitter, than the app will hold less appeal to you than to others.

Does Twitter #music have potential?

Sure. If musicians begin to release music consistently via tweets, the “Me” tab could become a useful clearinghouse for new music you want to check for. The “Popular” tab also does attempt to quantify exactly which artists are the most popular on Twitter, which beforehand was a process that was decidedly more arduous. Also, as more people use Twitter #music, the app’s algorithms will improve.

Your home’s tunes controlled by a wave of the hand or a voice command? It could happen, and the big-thinking Swede believes his music service could be the soundtrack to that very plugged-in vision.

Spotify’s Daniel Ek

(Credit: Greg Sandoval)

AUSTIN, Texas–Daniel Ek was waving his arms in the air, as if molding invisible clay. He swiped his right hand karate-chop style, made a big loop, and then grabbed an imaginary dial with his left and twisted his fist.

Ek, you see, was talking about the future, Paul Sloan wrote news.cnet.com. In this not-so-far-off future, maybe a decade from now, we’re all connected, everywhere, all the time — perhaps via Google Glass, perhaps via sensors built into our clothes, or through other wearable computing devices. Our touch-screen life will require no touching whatsoever, as we control what we’re listening to or seeing through hand motions or simply by talking. And we’ll experience it all in 3D.

“Actually, I don’t want the string section,” said Ek, grabbing the invisible song with his left hand. “I’ll just kill that.”

“He’s one of the few guys that picked up on the vision and ran with it,” said David Kusuk, a digital music consultant who co-wrote the 2005 book “The Future of Music,” predicting the shift to the access anywhere model, or what he calls, “music as water.” “I give Ek credit for having the guts to try it and really to stick his neck out there.”

I met with Ek, who is 30, at last month’s SXSW festival in Austin, where Spotify rented a small house on the east side of town and painted it Spotify green. A parade of musicians — rapperAngel Haze and singer-songwriter Tom Odell among them — played in the back yard. Ek held meetings at a picnic table and soaked in the scene. He wore the same beige Gibson T-shirt two days running, jokingly blamed the music labels negotiations for his baldness, and apologized for his dark sunglasses even though we sat in the shade. (Very sensitive, very blue eyes.)

Angel Haze performing at the Spotify House(Credit: Spotify)

Ek knows, of course, that he has a long way to go, and that it’s still way too early to claim victory. He comes across as modest, yet he’s hardly lacking for confidence. He remains undeterred by the graveyard of digital music startups, and by suggestions that Google or Appleor Amazon, all gunning for his business, could crush him.

Put simply, he said, “I’m more tenacious than most.”

A Commodore, a guitar, and a vision
Fortunately, Ek was also naive when it came to thinking the major music labels would eagerly embrace his plan to make a legal version of Napster.

At 16, he applied for a job at Google, but was turned down because the company required a degree. Eventually, he enrolled at Sweden’s Royal Institute of Technology, but, discovering he didn’t like math, he dropped out after just two months. He landed a contract gig for an ad network called Tradedoubler to build an analytics tool.

Martin Lorentzon, Spotify co-founder and chairman(Credit: Spotify)

That stint paid off: Tradedoubler paid him $1 million for the rights to what he had built, and he made another $1 million selling the patents. It also introduced Ek to his future Spotify co-founder, Martin Lorentzon — who, now 44, serves as Spotify’s chairman and Ek’s key sounding board. (The two take Steve Jobs-like walks daily when the always-traveling Ek is at headquarters in Stockholm.)

Ek was 23, rich, and unhappy. He’d flirted with the fast life — he picked up a Ferrari and a swank apartment in Stockholm — but he was unfulfilled. Ek dumped the car, retreated to a cabin, meditated, and played guitar, even toying with the idea of playing music full time. The result: a determination to combine his passion for music and tech.

Ek teamed up with Lorentzon, who was Tradedoubler’s chairman and far wealthier than Ek due to the company’s 2005 IPO. They holed up in Ek’s apartment, and built the product. It was modeled after iTunes, inspired by Napster, and packed with pirated music that they used as a demonstration to get licensing deals with the labels. That alone took two years — and that was just for European licenses so they could launch in Scandinavia, France, the U.K., and Spain.

The Spotify House at SXSW

(Credit: James Martin)

Just a year and half since the U.S launch, the labels are no longer worried that Spotify will eat into iTunes sales. Instead, label execs privately complain that Spotify isn’t growing fast enough, although it’s on track to pay rights holders $500 million this year alone — the same amount the company paid out in total since launching in 2008. The labels want Spotify to advertise more. The company last month launched its first-ever TV campaign and, just this morning, it rolled out an ad across the top of YouTube, which has become the go-to site for young people to listen to music. Music execs also want the company to strike partnerships with wireless carriers and Internet service providers to bundle the service, a strategy that fueled growth in Europe. The aim: to expand the “funnel,” which refers to the number of free users that Spotify has a chance to convert into paying customers.

“It’s so funny,” said Ek. “When we started off, it was the other way around. ‘We don’t want a big funnel because it might risk cannibalizing other sales.’ And now all they’re talking about is how we can grow faster. At least our goals are 100-percent aligned.”

“That is one of our biggest limiters to growth, the restriction that you can’t share any piece of content anywhere,” he said, talking about the all organizations that make buying music rights so complex. “You need collecting societies in every market and publishing deals in every market.” The result: Spotify now has rights deals with more than 50,000 entities.

And so Ek and his team are constantly trying to change an outdated system, to push the old guard to bend. In their arsenal: a growing mountain of data. That has been Spotify’s leverage along the way, and to hear Ek talk about it, data holds the key to working toward that soundtrack-for-every-moment that he envisions.

When Spotify was first negotiating with Warner Music Group for U.S. licenses, for instance, Warner wanted to restrict the amount of free music that people could access to three months, according to people involved with the negotiations. Spotify came back with data, culled from Scandinavia, that showed a lot of freeloaders become subscribers after four or five months. This was news to Warner, and it worked; they eventually settled on limitless, free access.

Spotify is now nearing a new deal with the labels to let it offer more free music on its mobile app. Why? Its data shows that many people are discovering Spotify on their phones, ignoring the desktop client entirely.

Mining the music
That’s all basic stuff, of course. But Ek said Spotify is collecting and analyzing more data related to music habits than any other company on the planet. Spotify is itself a platform, with companies like Blue Note, Billboard and Pitchfork creating apps that help people discover what they might want to hear, and sending rich streams of data to Spotify along the way. And while listeners can stream privately, Spotify is social by default; to date, its users have created and shared some 1.5 billion playlists, all of which generate even more types of data to parse and, Ek hopes, to lock in customers as more competitors enter the streaming fray.

“Our big problem is how do we make sense of what you want to listen to?” said Ek. “How do we make sense of 20 million songs? How do we make sense of what you want to hear when you wake up in the morning, when you go out on a Friday night? These are distinct moments in your life, and what we’re trying to do is make sense of all that, to make sense of that ocean of data.”

Data man: Spotify economist Will Page(Credit: Spotify)

That’s where Will Page comes in. Page, a London-based economist with long ties to the music industry, joined Spotify last fall. He spends his days deep in Spotify data, exploring all sorts of questions: What leads to hits on Spotify? Can activity on Spotify predict a mainstream hit? How much life do which playlists add to what songs? What exactly leads to virality? Why do older people listen to all 40 tracks of a particular compilation, where younger people listen to half that? And so on.

“When you think about it, we don’t just have unique data on every single stream on the service,” said Page, who stressed the data is based on unique identifiers and don’t reveal the person. “We also know where that stream was from — whether it was driven by Spotify or Facebook — and on top of that, you’ve got age, gender and location, and behavioral traits around playlists you’ve created or consumed. That’s far more unique than somewhere like YouTube.”

The trick is to merge what the data shows with the technology, something that is gradually happening. At last year’s Bonnaroo festival in Tennessee, for example, attendees received a wristband with an RFID tag built in. Each time you visited a stage, you could check-in with a simple swipe at a hub. Then, when you fired up your Spotify account, it had new playlists based on the bands you saw at the festival. The whole effort was largely a marketing push, but it gives a glimpse of the tailored musical experience in action, and its something the folks at Spotify are now working on bringing to festivals the world over.

“That was a giant step in terms of connecting Spotify to live music,” said Page. “This can happen at other events, where you wake up and Spotify knows where you were last night.”

The shift to mobile also opens up all sorts of possibilities, particularly because Spotify can know your phone’s every step. One example: Ek said Spotify is working on software that would let you seamlessly switch what’s playing through your phone’s headphones to your home sound system the moment you walk through the front door. The idea is that your smartphone will recognize the home Wi-Fi signal, at which point it will ask you if you want to tap a button to change to the home mode.

Read more about Daniel Ek here: http://cnet.co/14tzjZv

Making this future possible, too, is what Ek calls the “platformization” of everything. This phenomenon lets Spotify easily build its service into devices. Spotify now comes baked into some Samsung Smart TVs, Roku,Tivo, as well as in new Fords and Volvos. And Ek said the company is working on several more such initiatives to roll out this year.

Set-top boxes and smart autos are one thing; touchless screens and wearable computing another. Yet when you look at these steps — on the hardware front, and Spotify’s front — it’s easy to see them merging in ways that might even surprise Ek.

Already, that happened when his contractor was going through refurbishing options for his home in Stockholm. Think picking carpet and paint colors is hard? Try deciding which room needs programmable sensors built into which walls so that the lights and music around the home could be triggered by movement. Think of the applications: Walk into the living room, the music and lights turn on; leave for, say, more than 10 minutes, and they turn off.

Here’s the example presented to Ek. He could put motion sensors in the baby’s room, which would detect when the baby is asleep, at which point, the system would automatically dim the lights and start playing Barry White — the technician’s example, not Ek’s — for you and your wife in the other room. Then, when the baby wakes, the sensors cut the music and turn up the lights.

Ek isn’t going for that option, possibly because he’s both single and without a baby. He doesn’t yet know how he might build music into his house. But he holds this out as an example of where things are going.

“I’m not even suggesting that it’s a great idea,” Ek said. “We’re only in the beginning of figuring out all these kinds of moments.” Moments that, with the music labels and many publishers still in control of most of the world’s music, will rely as much on negotiations and corporate politics as algorithms and data.

Like this:

Sweden is home to a vibrant community of file-sharing activists, but it is also at the forefront of a global recovery in music sales driven by streaming music services such as Spotify, AFP’s Sören Billing reports.

Legal downloading sites like Apple‘s iTunes Store were once thought to be a panacea for the global music industry, providing an alternative to illegal download sites like Sweden’s Pirate Bay.

But if the high-tech Scandinavian nation is anything to go by, music downloads could soon be as obsolete as CDs or vinyl records.

iTunes’ success has been modest here, with the vast majority of consumers preferring to stream songs rather than owning them on a hard drive.

Last year, 2012, was the best year for music sales in Sweden since 2005, with 63 percent of revenue coming from digital sources, according to data from the Swedish Recording Industry Association (GLF). Out of that, 90 percent came from streaming services.

“Norway and Sweden are similar in that a large part of music revenue comes from streaming, and in that both countries have seen strong growth,” said Ludwig Werner, managing director of the Swedish chapter of the International Federation of the Phonographic Industry (IFPI).

Other countries, including Europe’s largest economy Germany, still derive most of their music sales from CDs, he noted.

With income still lagging the heydays of the early noughties, when file-sharing began eating into results, Werner said it was too early to tell if the music industry was out of the woods.

Last year’s sales of 943 million kronor ($148 million) in Sweden was up 13.8 percent from the previous year, but well below the 1.55 billion registered in 2002.

The Swedish turnaround has been driven by two events: In 2009, the Ipred law came into effect, giving copyright holders the right to require service providers to reveal details of users who share files, paving the way for legal action.

Also contributing to a rise in legal music sales was Spotify, the digital media juggernaut launched by Swedes Daniel Ek and Martin Lorentzon in 2008. The streaming music service still counts Sweden as one of its most successful markets.

“We do see a similar trend (for sales) across the Nordics, but primarily for Sweden and Norway where the penetration for streaming services is very high,” spokeswoman Marine Elgrichi said.

According to the company, the 1,000 kronor that a paying Spotify user spends on music per year is twice that of a user who downloads songs.

Asked about the criticism levied at the digital music service for how it compensates artists, Elgrichi said it pays 70 percent of revenues back to record labels and collecting societies, who then pay the artists.

Last spring, Spotify had paid out a total of 1.6 billion kronor. At the beginning of this year that amount had doubled.

“To double that figure in under a year shows the huge strides we’re making,” Elgrichi said.

Tom McAlevey, founder of Radical.FM, a Swedish music streaming start-up modelled on US-based Pandora Internet radio, said streaming music services would create “the most lucrative era the music industry has ever been in.”

According to his own calculations, between 100 and 200 plays on Spotify earns a record company the same amount of money it would make from a download.

“After that it’s just pure profit. No one’s buying anything a second time on iTunes,” he said.

“It’s going to be the most lucrative thing ever because you get paid forever,” he argued.

Artists’ criticism of streaming services like Spotify was beginning to subside as they were “starting to understand the math,” he said.

The rise of streaming music is already affecting how record labels operate. With more people discovering new artists through shared playlists and “tailored” radio stations like Pandora that predict what kind of music the listener wants to hear, there’s less need for costly advertising campaigns to
promote the performer.

“Previously most of our marketing activities were tied to paying for exposure,” said Robert Litsen, an executive at Swedish-based Cosmos Music Group.

Promotional campaigns for a singer or a band were now more focused on “what you communicate” rather than “how much you’re willing to pay,” he added.

Others believe it could shift the industry’s economic cycle away from the traditional spike in CD sales before Christmas.

“With less focus on the Christmas market, we can spread out the releases of albums at different times, when artists have more of a chance to stand out,” the managing director of Universal Music Sweden, Per Sundin, said in a recent report from IFPI.

Prior to the controversial Ipred law, Sweden was at the forefront of file-sharing activism, and in 2006 fans of the website Pirate Bay formed the Pirate Party to campaign for copyright reform.

But party leader Anna Troberg said she didn’t think the crackdown on file-sharers was behind the music industry’s newfound success.

“I think it’s because they’ve finally begun using new technology to their advantage, rather than trying to fight it,” she said.

Spotify was a good alternative for “chart music”, but finding the sort of niche acts she listened to herself was harder, Troberg noted. Read more about the story here: http://bit.ly/122rkig

John Paul Titlow for readwrite.com wrote that the rise of all-you-can-stream services like Spotify have made some artists nervous about the model’s potential impact on music sales. It’s why bands like Coldplay have delayed the arrival of new albums on Spotify and others, like the Beatles and AC/DC, are holding out all together. Logically, it makes sense: If you make your music available to stream for free, people are less likely to buy it.

Right? Not always. Read more here: http://bit.ly/11gJpZA

Ahead of its release on March 19, Justin Timberlake’s new albumThe 20/20 Experiencewas streaming in its entirety not just on Spotify and Rdio, but at the iTunes store itself. Anybody who wanted to could quickly and legally access the album for a week. Then it was released. And it became the most pre-ordered album in iTunes history, surging past his record label’s sales expectations by 63%.

It’s good news not just for Timberlake himself, but for the music subscription model that he plans to embrace when MySpace — of which he is part owner — launches its own service later this year. MySpace will join Google, Amazon, Beats and God knows who else in entering the digital music subscription market in 2013.

Timberlake’s experience would seem to debunk the thesis that streaming can’t support artists and thus isn’t in their best interests. Indeed, his success will likely make him a poster child for the music subscription revolution as the industry marches toward a future in which music is rented more than it’s owned.

But hold on a second. For one thing, we’re not all Justin Timberlake. The pop megastar released his first solo album over a decade ago, after years of global success as a member of a massively popular boy band. In the same way that Radiohead’s 2007 experiment in “pay-what-you-want” record sales didn’t create a new model that worked for everybody, artists can’t necessarily look to Timberlake for cues about where their careers might be headed.

What The 20/20 Experience launch does show is that subscription services, while not ready to replace paid downloads as a revenue stream for the industry, can be a critical tool for marketing and ultimately driving sales. In time, the revenue available to streaming services may reach more sustainable levels. In the meantime, it’s nice to know the artists who embrace them aren’t shooting themselves in the foot by doing so.

Streaming may have promise, but it’s no silver bullet. The music market’s digital future is going to be a hybrid of approaches, some of which will work better than others in particular circumstances. Timberlake’s success is interesting — meaningful, even — but the way forward still isn’t a simple one.

Regardless if you’re a musician or music consumer, your music life is about to change. Slowly but surely digital music distribution has been evolving from downloads to streaming, but that transition has been really picking up speed over the last 12 months. With Spotify leading the way thanks to reams of publicity, more and more consumers are finding that the joy of renting music beats owning it by a long shot.

First is the fact that Jimmy Iovine’s Daisy project (named after the first computer generated song) just received a $60 million injection from the likes of Warner Music Group’s ownerLen Blavatnik, Fort Worth billionaire Lee Bass and Australian financier James Packer. This is a serious investment by some deep pockets that know what they’re doing and don’t like to lose. Then comes word that Apple’s Tim Cook recently took a meeting with Iovine to be briefed on the project. Does that mean a collaboration? We don’t know, but at the very least, Apple has a good working relationship with Iovine, since he was one of the first to sign Universal MusicontoiTunesback in 2001. Together they’d be a powerhouse, a true 1200 pound gorilla. Chances are that Apple will chose to go it alone and just stay at 800 pounds though. It doesn’t need a partner, but if there’s something there worth buying, they have lots of money.

Then comes word that Google has been quietly making deals with all the major labels for their own YouTube-based subscription streaming service to be launched later in the year.

If all this were happening a couple of years ago we would’ve looked to only one of these prospective services to be left standing at some point, with the others falling by the wayside. But this is a different time, with the streaming business far more mature thanks to the likes of Spotify, Pandora, Rdio, Slacker, et al. It’s now probably possible that all of these new services survive if they’re at least half-way decent in their user operation and offerings.

This is definitely going to be a big win for consumers, with nearly an unlimited selection of songs available for a relatively small monthly fee (not sure what the price point will end up being, but $9.95 keeps being mentioned). Consumers are quickly seeing the advantages of renting their music.

It will be a different story for artists and songwriters however. By now everyone knows how little the royalty can be from a stream, with stories abounding about income lost by the writer and artist. Although a full transition to streaming will be a godsend for the labels, with steady monthly income actually bolstering their bottom line, you can bet that not much of that will trickle down to the artists – at least at first.

It’s not going to happen overnight, but within a matter of time, you’ll see the entirety of the management and law categories of the music business devise a better way to get paid, and eventually force the labels to fall in line. And when that happens, it will trickle down to the DIYers who insist on doing it their way. To what degree this all takes place, we’ll have to wait and see.

While we’re currently in the era of Music 3.0, we’re about to see the next stage of the music business. Welcome to Music 3.5! Read more here: http://bit.ly/X6Yx7o

Maybe music executives can finally stop singing the blues. Music piracy is on the decline, analysts say, while an industry group said digital music sales in 2012 drove global music industry revenues up for the first time since 1999.

It’s not a very big gain for the music industry — just 0.3 percent to $16.5 billion — but even that small uptick may be a sign that digital music has finally put the industry on the path to recovery. Digital music and services, the report said, grew 9 percent in the past year. That comprises digital downloads, as well as newer subscription services such as Spotify and ad-supported services including Pandora.

“No doubt, this is welcome news,” said Recording Industry Association of America spokesman Jonathan Lamy, who said over half of the industry’s revenues come from digital services now. “We are starting to turn the corner, and that’s great news for the business and fans.”Not only have free or low-priced streaming services given music lovers easy access to their favorite tunes, the NPD Groupfound in a separate study that broader access to music is also driving fewer people to download songs illegally. These services have gained some industry support because they allow consumers to get the music they want while still supporting artists, record labels and others in the industry.

In its annual music study, the analysis group found that consumers are sharing less illegal music across the board. Not only is the volume of illegally downloaded music files over file-sharing networks down 26 percent compared to the previous year, so is the number of people who burn and rip CDs, swap music files on hard drives and download music from digital lockers.

As the Times reports, the comparatively teensy amount artists earn from streaming services has caused concern throughout the industry.

While the average musician might earn 7 to 10 cents on an iTunes download, artists receive a fraction of a fraction of a cent each time their songs are played on streaming services. That’s not terrible if you’re Psy, who a Google executive recently said had earned $8 million on the 1.2 billion views for “Gangnam Style,” a rate of roughly 0.6 cents per view. It’s less good if you’re Zoe Keating, a self-described “avant cello” musician who late last year revealed that despite getting more than 1.5 million plays on Pandora in a six-month span, she received less than $1,700. Spotify was a bit kinder: Her 131,000 plays last year yielded almost $550.

Artists might dream of penny royalties, but streaming service providers are swimming in big bucks. Pandora is publicly traded, with a share price that values it at nearly $2 billion. Spotify isn’t public, but its investors have reportedly pegged its value at $3 billion. To put that into perspective, the entire music industry saw revenues of roughly $7 billion in 2011, according to the Recording Industry Association of America.

Streaming service companies might be worth a lot on paper, but they’re not contributing much to the record business just yet. Pandora had $202 million in “content acquisition costs” in its last four reported quarters, and Spotify recently said it had made $500 million in royalty payments, the Times notes. That pales in comparison to music downloads’ $2.6 billion in 2011 sales.